CERAWeek 2026: Global Oil Supply Disruption Unprecedented in Scale With no Near-Term Resolution, Executives Say

HOUSTON — The closure of the Strait of Hormuz has produced a supply disruption with no parallel in the modern history of global oil markets, compounded by the simultaneous infrastructure attacks across Central Asia that have removed a second significant export corridor, executives and officials said Tuesday at CERAWeek 2026 by S&P Global in Houston.

The sheer scale of the current disruption dwarfs every prior supply shock, including the 1973 Arab oil embargo, said Gareth Ramsay, chief oil economist at BP. The Hormuz closure is running a net supply loss of 15 million to 16 million b/d when accounting for Iranian oil still moving and partial pipeline diversions, roughly three times the volume lost during the 1973 embargo, when the world was consuming only 55 million b/d, according to Ramsay.

“I don’t think you can really compare this with any disruption in the past. It’s incomparable. We’ve not seen anything like this. There’s been no disruption of this scale at any point,” Ramsay said.

A second simultaneous supply shock is unfolding in Central Asia. Kazakhstan Energy Minister Yerlan Akkenzhenov said attacks on the CPC pipeline, which carries approximately 70% of Kazakhstan’s crude exports to the Black Sea, have created a critical bottleneck with no short-term alternative routing.

Kazakhstan produces approximately 1.7 million b/d of crude and approximately 2.1 million b/d of total liquids including condensate and LNG, said Akkenzhenov. Alternative exports routes will take approximately three to five years to implement, he added.

“Nobody could ever imagine that those kinds of attacks would be done on an international project. CPC pipeline is owned by well-known international oil majors. This is civilian infrastructure that is not used for any kind of means of war,” Akkenzhenov said.

The world has no mechanism to immediately offset the Hormuz closure, Ramsay said. The only country with meaningful spare production capacity is Saudi Arabia, whose export terminals feed directly into the Strait, leaving that capacity effectively stranded for as long as the closure holds.

Ramsay said the crisis will force governments to reconsider the tradeoff between the efficiency of integrated global energy markets and the resilience of domestic supply infrastructure.

“We have built a wonderful and incredibly efficient global market. But efficiency is also sometimes fragility, and we will need possibly to pay prices, pay costs, for a more resilient and in some ways less efficient system. Will countries now ask, do we need our own refining capacity? Do we need to keep refineries online even if they are uneconomic? Countries will make
different choices for the entire system,” Ramsay said.

Nigeria’s Minister of State for Petroleum Resources Heineken Lokpobiri said the crisis has created an investment opportunity for African producers that the continent was denied for more than a decade by a global energy transition narrative that discouraged upstream development. Investment is now returning he said.

The Dangote refinery, Africa’s largest at approximately 650,000 b/d capacity, has reduced Nigeria’s dependence on imported refined products and freed up foreign reserves previously consumed by fuel import costs.

Lord John Browne, chairman and co-founder of BeyondNetZero at General Atlantic and former chief executive of BP, said the pattern of energy shocks producing lasting structural change is consistent across six decades of market history.

“I’ve been through six of these shocks and some minor shocks in between. Every time something does change. Energy security was on the cards with Russia. Energy security has come further up the ladder now with the Persian Gulf. Each one has created a new set of products,” Browne said.

Browne said the geographic consequence of the current shock will be concentrated in Asia, where every major economy is an energy importer with no meaningful domestic production buffer.

Reporting by My Nguyen, mynguyen@opisnet.com; Editing by Bayan Raji, braji@opisnet.com and Michael Kelly, mkelly@opisnet.com